Housing construction is currently falling short of the government's targets in New South Wales but the new pathway for approvals may accelerate the development of new homes.
The NSW government launched the Housing Delivery Authority (HDA) last week to speed up approval processes and boost new housing development in the state.
For projects that cost more than $60 million in Greater Sydney and $30 million in regional NSW, proposals will no longer need to assessed by local councils and can instead be submitted for assessment by the HDA. In some cases, this will reduce the approval process by years.
In the 2023-24 financial year, it took 183 days, on average, for development applications (DA) to be approved for medium-density buildings in our largest state. This marked a 45% increase in approval time compared to three years ago.
In some local government areas, such as the Central Coast and North Sydney, assessment time for DAs were over 300 days.
In September 2024, total dwelling approvals were 37% below the 10-year pre-pandemic average while approval numbers for 'other residential dwellings', which include properties such as apartments and townhouses, were 58% lower than the 10 year pre-pandemic average.
Longer approval times impact the number of projects that are built with many unable to progress to the construction phase. This is a major contributor to slowing the pace of new developments.
Fewer approvals will affect the housing supply across the nation. To address this issue, the HDA plans to expedite approvals for larger projects which will deliver a substantial number of homes.
These projects often require significant rezoning before a DA is approved, but with this new pathway, submissions for both rezoning and the DA will be assessed concurrently by the HDA without council intervention.
They will be considered with the state's housing priorities in mind.
This will greatly reduce the time taken for approvals, lower development costs and reduce uncertainty for developers, potentially encouraging more housing projects to be initiated and subsequently completed.
The NSW government has a target to build 377,000 new homes by 2029 which represents about 18,000 homes each quarter. During the past two years, the state has completed an average of just 12,000 homes each quarter, which is well-below the required rate to meet the target.
The introduction of the HDA is a promising step towards accelerating housing development and achieving our ambitious targets but greater action is necessary to ensure that we have an adequate number of homes for the growing population in NSW.
